3 Ways You Might Have Been Mis-sold a Mortgage

Choosing a mortgage can be one of the most important decisions you can make in your life, which is why it is vital that you work with a mortgage advisor to weigh up all your options. However, the main problem is that the advice you receive could be completely wrong and unsuitable, ultimately causing financial stress and loss that could have been prevented with the proper advice.

mortgage compensation

If you find you are experiencing financial difficulties regarding your mortgage, you may have actually been ill-advised, making you a victim of mortgage mis-selling. There are a variety of ways you may have been mis-sold your mortgage, including these top three problematic issues:


  1. Fixed rates

There has been a series of criticism in the past year regarding interest-only mortgages, as many people have found themselves a facing financial crisis due to being mis-sold a fixed-rate household loan.


Fixed-rate mortgages are usually advised as a short-term financial solution, as it allows the mortgagor to only pay off the interest over a fixed term. Although, the borrower must then pay off the rest of the loan by the mortgage end date via a lump sum.  The main issue with this type of mortgage is that many people were not informed of the lump sum clause, which has resulted in a financial struggle that has frequently surpassed retirement. Others may not have the substantial income to pay off the lump sum without a practical financial agreement, although even this will be hard to secure. Overall, it is clear that this type of mortgage only really accommodates individuals who have the income or investment to afford it.

If you were advised to take out an interest-only mortgage, despite not being financially capable of repayment, you have been mis-sold.


  1. Fast track applications

You may have been encouraged to take out a fast-track mortgage, also known as self-certification, which allows you to borrow without providing proof of income.

This may have been the ideal option for anyone who was self-employed or working on a commission basis, as a self-cert mortgage allowed you to specify income without providing evidence. However, there have been several occasions where a mortgage advisor has offered a self-certification mortgage to someone who could provide evidence, as this could increase their commission rates. This usually resulted in mass amounts of debt, as many people could not afford the mortgage they were given. Self-certification mortgages have now been banned in the UK since 2011, as the Financial Conduct Authority has now ruled that affordability checks must be implemented before any mortgage agreement can be made.

You may have been mis-sold if, despite being able to provide details of your income, you were still offered a self-certification mortgage. You could have also been mis-sold if you just simply could not afford the initial repayment plan and were still advised to go ahead.


  1. Clearing debts

Many people were advised that the cheapest way to clear debts – such as credit-card bills, or insecure finance loans – was to re-mortgage and consolidate their arrears.

Whilst this may be great in the short-term, it actually means you are paying off your debts for longer, resulting in additional interest. There are a variety of issues that have been raised regarding re-mortgaging, as in some instances, homeowners were not advised about the extended payments and interest. Initially, they may have been satisfied with their low-cost outgoings; however, as time goes on, those payments will increase and appear never-ending.

In some cases, this has resulted in severe financial loss due to poor advisement from an appointed mortgage broker, who recommended re-mortgaging without accounting for the mortgagor’s financial position.

Make a claim with Mis-sold Mortgage Experts


At Mis-sold Mortgage Experts, we provide our clients with the upmost advice and support regarding making a claim for mortgage mis-selling. We can help you recover the monies that you are owed, enabling you to return to your financial condition before taking out your mortgage. For further information regarding our mis-sold compensation services, get in touch by via email or call us on 0800 756 3986.

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